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Tuesday December 18, 2018

Finances

Apple's Shares Fall

Apple Inc. (AAPL) released its quarterly earnings report on Thursday, November 1. The tech company reported better-than-expected earnings and revenue for
the fourth quarter but missed the mark on earnings projections for the holiday quarter.

Apple reported quarterly revenue of $62.90 billion. This is up from last year's fourth quarter revenue of $52.58 billion and above the $61.57 billion that
Wall Street predicted.

"We're thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our 2 billionth iOS device,
celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple's history," said Apple CEO Tim Cook. "Over the
past two months, we've delivered huge advancements for our customers through new versions of iPhone, Apple Watch, iPad and Mac as well as our four operating
systems, and we enter the holiday season with our strongest lineup of products and services ever."

The company announced earnings of $14.13 billion for the quarter, which is up from earnings of $10.71 billion one year ago. On an adjusted earnings per
share basis, the company reported earnings of $2.91 per share, which was more than the $2.78 per share that analysts predicted.

Despite exceeding Wall Street's earnings and revenue expectations, shares fell more than 7% after earnings were released, due to lower-than-expected revenue
projections and disappointing iPhone sales. In the fourth quarter, Apple's iPhone sales brought in $46.89 million in revenue, missing the $47.5 million
analysts anticipated. For the holiday quarter, Apple announced on Thursday that it expects revenue to fall between $89 billion and $93 billion, which fell
short of analysts' average revenue projections of $93.02 billion.

Apple Inc. (AAPL) shares ended the week at $207.48, down 5.3% for the week.

Facebook Posts Mixed Earnings Report

Facebook, Inc. (FB) reported quarterly earnings on Tuesday, October 30. The social media giant beat earnings expectations but fell short on revenue.

Facebook announced revenue of $13.73 billion for the third quarter. This is up 33% from revenue of $10.33 billion reported in the same quarter last year,
but fell below the $13.78 billion in revenue that Wall Street expected.

"Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day," said Facebook founder
and CEO Mark Zuckerberg. "We're building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce
as well."

The company reported earnings of $5.14 billion for the quarter, up from earnings of $4.71 billion one year ago. On an adjusted earnings per share basis, the
company posted earnings of $1.76 per share, which was above analysts' estimates of $1.47 per share.

The social media giant faced its fair share of challenges in the third quarter. In September, Facebook announced that it discovered a data breach affecting
nearly 30 million users' accounts. During a call with investors on Tuesday, Zuckerberg acknowledged the breach, stating, "We have a long road ahead to
prevent these types of attacks in the future." He added, "The upcoming election will be a real test of the protections we've put in place."

Facebook, Inc. (FB) shares ended the week at $150.35, up 1.2% for the week.

General Electric's Shares Tumble

General Electric Company (GE) announced quarterly earnings on Tuesday, October 30. The company reported earnings and revenue that fell below analysts'
predictions, causing shares to fall more than 8% after the report's release.

Revenue for the third quarter reached $29.57 billion. This was down from revenue of $30.66 billion reported during the same quarter last year and below the
$30.25 billion in revenue that analysts expected.

"After my first few weeks on the job, it's clear to me that GE is a fundamentally strong company with a talented team and great technology," said GE CEO H.
Lawrence Culp Jr. "However, our results are far from our full potential. We will heighten our sense of urgency and increase accountability across the
organization to deliver better results."

GE reported a quarterly net earnings loss of $22.86 billion, which is less than last year's third quarter earnings of $1.19 billion. On an adjusted earnings
per share basis, the company posted earnings of $0.14 per share, which fell short of the $0.20 per share that analysts predicted.

The company's earnings loss was due, in large part, to a $22 billion noncash goodwill impairment charge related to acquisitions made in GE's power business.
On Tuesday, the company announced that the Securities and Exchange Commission and the Department of Justice will be investigating the charge. GE also
revealed on Tuesday that it will be cutting its dividend from $0.14 per share to $0.02 per share. The news, coupled with the company's revenue and earnings
miss, caused shares to fall 8.8% after the report's release.

General Electric Company (GE) shares ended the week at $9.30, down 18.6% for the week.

The Dow started the week of 10/29 at 24,819 and closed at 25,271 on 11/2. The S&P 500 started the week at 2,683 and closed at 2,723. The NASDAQ started
the week at 7,272 and closed at 7,357.

Yields Rise on Strong Jobs Data

Yields on U.S. Treasury bonds rose on Friday after the release of the latest jobs report. Earlier in the week, the yield on the 30-year Treasury bond
reached a four-year high following the release of better-than-expected private payrolls data.

On Friday morning, the Commerce Department provided the latest jobs report, which revealed that job growth rebounded in September while wage gains surpassed
3% for the first time since 2009. Nonfarm payrolls rose 250,000 in October, far surpassing the 190,000 increase that analysts expected. Average hourly
earnings were up 3.1% year-over-year, marking the best annual increase in nine and a half years.

"These were excellent job growth numbers and excellent revisions," said Jim Vogel, interest rate strategist at FTN Financial. "Inside the wage growth
figures, you now have this annualized growth rate above 3%. So, we've got almost exactly what we expected without a blowout in wage growth."

After the jobs data was released, the yield on the 10-year Treasury note jumped two basis points to 3.176%. The yield on the two-year note rose 2.4 basis
points to 2.891%.

Some investors speculate that the upbeat jobs report could nudge the Federal Reserve to raise interest rates one more time before the year is up. The most
recent rate hike was in September, which was the third time the Fed raised borrowing costs this year.

"The economy really cranked it up a notch in October," said Chris Rupkey, chief financial economist at MUFG. "[T]his will give Fed officials the confidence
to keep raising interest rates to normal levels because this economy does not need the support of monetary policy to continue to grow."

On Wednesday, the yields rose after Automatic Data Processing reported that the economy added 227,000 private sector jobs in October, far surpassing the
189,000 jobs analysts expected. After the data was released, the yield on the 30-year Treasury bond rose 3.9 basis points to a four-year high of 3.397%.

The 10-year Treasury note yield closed at 3.22% on 11/2, while the 30-year Treasury bond yield was 3.46%.

Mortgage Rates Fall

Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, November 1. The report revealed average mortgage rates were slightly
lower this week than they were one week ago.

The 30-year fixed rate mortgage averaged 4.83% this week, down from 4.86% last week. During this time last year, the 30-year fixed rate mortgage averaged
3.94%.

This week, the 15-year fixed rate mortgage averaged 4.23%, down from last week when it averaged 4.29%. Last year at this time, the 15-year fixed rate
mortgage averaged 3.27%.

"While higher mortgage rates have led to a decline in home sales this year, the weakness has been concentrated in expensive segments versus entry-level and
first-time buyer which remains firm throughout most of the rest of the country," said Sam Khater, Chief Economist at Freddie Mac. "Despite higher mortgage
rates, the monthly mortgage payment remains affordable. For many buyers, the chronic lack of entry-level supply is a larger hurdle than higher mortgage
rates because choices are limited and the inventory shortage has caused home prices to rise well above fundamentals."

Based on published national averages, the money market account closed at 1.22% on 11/2. The one-year CD finished at 2.57%.